Statement of Compliance with the QCA Corporate Governance Code

Chairman’s Introduction

Corporate governance is an important part of what we do and Marechale Capital Plc has chosen to follow the Quoted Companies Alliance’s 2018 Corporate Governance Code (the ‘QCA Code’). The Board of Directors is accountable to the shareholders of Marechale Capital Plc (the "Company") for good corporate governance and the directors use their reasonable endeavours to ensure that the Company’s governance arrangements are robust, and therefore follows the QCA Code, which the Directors deem most relevant to an AIM company in light of the size, nature and scope of its activities. The Company is also subject to the UK City Code on Takeovers and Mergers. The website was last updated on the 28th September 2018 and this information is being disclosed for the purposes of Rule 26 of the AIM Rules.

Mark Warde-Norbury

Chairman

Changes to corporate governance regime

The Board have adopted the QCA Code in line with the London Stock Exchange’s recent changes to the AIM Rules requiring all AIM-listed companies to adopt a recognised corporate governance code. Our report sets out in broad terms how we comply.

Principle 1: Establish a strategy and business model which promote long-term value for shareholders

The Company is a private equity advisory business based in the UK and specialising in leisure and hospitality businesses as clients. Fees are taken in cash and equity or warrants and it is the Board’s objective to increase shareholder value through increasing value in the investments it holds on its balance sheet as well as the fees it generates.

Principle 2: Seek to understand and meet shareholder needs and expectations

The Company remains committed to listening and communicating openly with its shareholders to ensure that its strategy, business model and performance are clearly understood.

The AGM is the main forum for dialogue with retail shareholders and the Board. The Notice of Meeting is sent to shareholders at least 21 days before the meeting. The chairs of the Board and all committees, together with all other Directors, routinely attend the AGM and are available to answer questions raised by shareholders. For each vote, the number of proxy votes received for, against and withheld is announced at the meeting. The results of the AGM are subsequently published on the Company’s corporate website.

Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success.

Marechale is a small company but recognises that engaging with our stakeholders is important. Stakeholders include clients, employees, and suppliers and feedback is obtained through interaction with such parties in the normal course of business.

Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation

Audit, risk and internal control

Financial controls

The Company has an established framework of internal financial controls, the effectiveness of which is regularly reviewed by the Audit Committee and the Board in light of an ongoing assessment of significant risks facing the Company.

The Board of Directors

The Company is led and controlled by a Board comprising 3 executive directors and 1 non-executive director. There is a schedule of matters specifically reserved to the Board for its decision. Board meetings are held when required and no decision of any consequence is made other than by the directors. All directors participate in the key areas of decision-making, including the appointment of new directors, although there is no separate Nomination Committee due to the current size of the Board. The Board receives timely information on all material aspects about the Company to enable it to discharge its duties. All directors have equal responsibility in law for managing the Company's affairs and submit themselves for re-election at the Annual General Meeting at regular intervals.

The Audit Committee

Comprising the Chairman and non-executive director, the Audit Committee meets not less than once a year and the rest of the Board may attend at the invitation of the Audit Committee. The Audit Committee meets to review the effectiveness of the systems and controls within the Company, as well as reviewing the integrity of the financial information provided to the Board. The Audit Committee assists the Board in ensuring that the Company's published statements give a true and fair view, and reviews the arrangements by which the staff of the Company may in confidence raise concerns about possible inappropriateness in the financial reporting of the Company or other matters.

Principle 5: Maintaining the Board as a well-functioning, balanced team led by the Chair

The Board comprises the Executive Chairman, two Executive Directors and one Non-Executive

Director.

Although the Company has only one non-executive director (who is considered to be independent) compared with the minimum of two suggested by the QCA Code, in view of the limited scale of development of the Company’s business, the Board is satisfied that it has a suitable balance between independence on the one hand, and knowledge of the Company on the other, to enable it to discharge its duties and responsibilities effectively.

All Directors are encouraged to use their independent judgement and to challenge all matters, and in addition are required to commit such time as is necessary to fulfil their roles.

Directors’ conflict of interest

The Company has effective procedures in place to monitor and deal with conflicts of interest. The Board is aware of the other commitments and interests of its Directors, and changes to these commitments and interests are reported to and, where appropriate, agreed with the rest of the Board.

Principle 6: Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities

The Board is satisfied that, between the Directors, it has an effective and appropriate balance of skills and experience.

All Directors retire by rotation at regular intervals in accordance with the Company’s Articles of Association.

Appointment, removal and re-election of Directors

The Board makes decisions regarding the appointment and removal of Directors, and there is a formal, rigorous and transparent procedure for appointments. The Company’s Articles of Association require that one-third of the Directors must stand for re-election by shareholders annually in rotation; that all Directors must stand for re-election at least once every three years; and that any new Directors appointed during the year must stand for election at the AGM immediately following their appointment.

Independent advice

All Directors are able to take independent professional advice in the furtherance of their duties.

The Directors keep their skill sets up to date through relevant transactional experience, supplemented where appropriate with advice from professional advisers.  Details of the Directors’ experience are contained in the Investor Relations section of this website.

Principle 7: Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement

During the year the Board review the performance of the team as a unit to ensure that the members of the board collectively function in an efficient and productive manner, and the individual performance of directors and members of Staff.  The criteria against which such review takes place will be formalised in accordance with the QCA Code and disclosed on this website.  In addition, succession planning will be developed when required by growth in the scale of the Company’s operations.

The Remuneration Committee

Comprising the Chairman and non-executive director, the Remuneration Committee is responsible for the Company's remuneration policy.

Principle 8: Promote a culture that is based on ethical values and behaviours

The Board seeks to promote a healthy corporate culture characterised by honesty, professionalism, fairness and integrity through leading by example and doing what is in the best interests of the Company and its stakeholders.  This is monitored and assessed by the Directors in the normal course of business.

Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board

Internal Controls

The Board acknowledges its responsibility for establishing and monitoring the Company's systems of internal control. Although no system of internal control can provide absolute assurance against material mis-statement or loss, the Company's systems are designed to provide the directors with reasonable assurance that problems are identified on a timely basis and dealt with appropriately.

The key procedures that have been established and which are designed to provide effective control include:

Management Structure

The Board meets regularly and when required to discuss all issues affecting the Company.

Compliance

The Company has a framework for monitoring and managing the regulatory and compliance issues that the Company is required to comply with.

Financial Control

The Company has put in place a system for financial controls that are appropriate to a business of its size and nature. 

The Board regularly reviews the effectiveness of the systems of internal control and considers the major business risks facing the Company.

The roles of the Board committees are described under Principle 4 and Principle 7 above.

Principle 10: Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

The Company communicates with shareholders through the Annual Report and Accounts, full-year and half-year announcements and the Annual General Meeting (AGM). A range of corporate information (including all Company announcements (including the results of shareholders votes), accounts, and circulars) is also available to shareholders, investors and the public on the Company’s website.

Audit Committee report

The Audit Committee has met formally once during 2018 to consider and approve the full year report and accounts for the year ended 30 April 2018.

Remuneration Committee report

The Remuneration Committee has met on one occasion during 2018 to consider and approve bonus allocations for the year ended 30 April 2018.

Marechale Capital is an investment banking and corporate finance business

We use our established relationships and sector specialisation to raise capital and refinance high growth companies and funds primarily in the consumer brands, leisure and retail sectors.